India's gold craze heats up, imports jump 27%

In the economic landscape of India, the surge in gold imports during the April-December period of the fiscal year has become a notable factor influencing the country's current account deficit (CAD).

According to recent government data, gold imports witnessed a significant increase of 26.7%, reaching USD 35.95 billion, compared to the same period in the previous year when it stood at USD 28.4 billion.

The month of December 2023 particularly stood out, with imports of the precious metal experiencing a staggering 156.5% jump to USD 3 billion. This surge is attributed to robust demand in the market, reflecting the enduring popularity of gold among Indian consumers.

Switzerland emerges as the primary source of gold imports, contributing approximately 41% of the share, followed by the UAE with around 13%, and South Africa with approximately 10%. Remarkably, gold constitutes over 5% of India's total imports. Currently, there is a 15% import duty on gold, adding a financial dimension to the dynamics of gold trade in the country.

Despite the notable increase in gold imports, the overall trade deficit (the difference between imports and exports) has shown signs of improvement. For the first three-quarters of the fiscal year, the trade deficit  narrowed to USD 188.02 billion, down from USD 212.34 billion during the same period in the previous fiscal year (April-December 2022).